Healtheon/WebMD Continues Rival Buyout

Two days after its $4.9 billion purchase of a competitor in the healthcare
management space, Healtheon/WebMD
Wednesday spent approximately $313 million on another rival as
part of its quest to be the leading medical resource on the Net.

Healtheon/WebMD (HLTH)
acquired OnHealth Network Co. (ONHN)
, one of its biggest competitors in terms of consumer healthcare Web sites,
for approximately $313 million in stock. Shareholders of OnHealth stock are
to receive .189435 shares of Healtheon/WebMD Common Stock for each share of
OnHealth stock. Closing of the transaction, which will be accounted for as a
purchase transaction, is expected in the second quarter this year, subject
to regulatory approval.

OnHealth is a consumer site that provides information and community services
about health, medicine and wellness. The marriage with Healtheon/WebMD is
set to create the most comprehensive source for consumer health information,
communities, e-commerce and healthcare transactions on the Internet, they
said. Its goal is to become the most trafficked health sites for consumers
and physicians.

The two firms anticipate integrating content, advertising and sponsorship
programs immediately to leverage the
sites’ complementary demographics and content focus. Plus, the additional
consumer base brought
to Healtheon/WebMD can be leveraged to encourage physician adoption and
utilization of new Healtheon/WebMD planned services and transactions.

“We believe that this acquisition will increase the direction of consumers
to one single portal, supporting our business model of bringing together the
physician and consumer to connect them with the entire healthcare industry
and facilitate a better healthcare delivery system,” said Jeff Arnold, chief
executive officer of Healtheon/WebMD. “We will quickly enhance the breadth
and depth of our consumer offerings with OnHealth’s quality, original
content and tools to solidify WebMD’s position as the leading Internet
portal for health in the broadest sense.”

OnHealth’s e-commerce partners include American Express, AstraZeneca Pharmaceutical, Merck, The
Ford Motor Co.
, Glaxo
, Nieman Marcus, Proctor and
Johnson & Johnson.

The acquisition is the latest in Healtheon/WebMD’s shopping spree. The
company Monday paid $4.9 billion to acquire Medical Management Corp., and
its subsidiary, a provider of management tools for physicians
and other healthcare professionals.

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